Jse Limited · JSE:JSE
Jse — Investor Presentation (March 2017)
24 slides from Jse's investor presentation, March 2017
Slide 1: Module 5: Deciding which Shares to Buy
Module 5 Deciding which Shares to Buy
Slide 2: Module road map
module road map
Slide 3: Topic 1: Where to get information
Module 5 Topic 1: Where to get information
Slide 4: Where to get information
Where to get information Company website Stock brokers Financial and business newspapers and magazines
Slide 5: Exchange Traded Funds
Where to get information Exchange Traded Funds JSE Cost Listed effective Divesification Dividends
Slide 6: Topic 2: What to do with the information
Module 5 Topic 2: What to do with the information
Slide 7: What to do with the information
What to do with the information Understand the company’s financial condition Financial Financial statements ratios
Slide 8: What to do with the information: Financial Statements
What to do with the information Financial Statements Balance Income sheet statement Net worth = assets – liabilities Financial Profit = revenue – expenses Ratios
Slide 9: Balance Sheet
What to do with the information Balance Sheet (Statement of Financial Position) Net worth = assets – liabilities
Slide 10: Income Statement
What to do with the information Income Statement (Statement of Comprehensive Income) Profit = revenue – expenses
Slide 11: Topic 3: Making sense of the numbers
Module 5 Topic 3: Making sense of the numbers
Slide 12: Making sense of the numbers
Making sense of the numbers What am I How much buying? am I paying?
Slide 13: What am I buying?
What am I buying? % Sales Income Growth? 5% profit Statement 10%? Debt Balance Debt to Equity Sheet equity ratio Company Dividend Dividends Results yield?
Slide 14: What am I buying? Debt to equity ratio
What am I buying? Debt Balance Debt to Equity Sheet equity ratio Total debt Total equity Less than 1 Greater than 1 Always compare with industry averages
Slide 15: What am I buying? Dividend yield
What am I buying? Compant Dividend Dividends results yield? Annual Dividends per Share Price per share Increasing Dividend yield, Increasing Dividend yield, while while share price increases share price drops Always compare with industry averages
Slide 16: What am I buying? Return on equity
What am I buying? Net Income income statement ROE (Return on Equity) Balance Equity sheet Net income Equity Always compare with 15% more industry averages
Slide 17: Making sense of the numbers
Making sense of the numbers What am I How much am buying? I paying?
Slide 18: Price vs. Value
How much am I paying? Price vs. Value
Slide 19: How much am I paying?
How much am I paying? might be over-valued Market capitalisation Market Cap greater than Equity might be Net asset value (NAV) Market Cap less than Equity under-valued (also called the Equity or Net worth) Earnings per share How much of the company profits go to shareholders? Price to Earnings ratio
Slide 20: Topic 4: Putting it all together
Module 5 Topic 4: Putting it all together
Slide 21: Two questions to ask
Two questions to ask… What am I How much buying? am I paying?
Slide 22: How much am I paying? P/E ratio
How much am I paying? Price to Earnings ratio Tells you if you are paying too much (P/E ratio) Price per share Earings per share Price is 5 times more than earnings Share price = R50 EPS = R10 P/E = 50/10 = 5 It takes 5 years to recover purchase price from earnings generated (assuming constant earni
Slide 23: Which shares would you buy?
Which shares would you buy? Blue Ltd Red Ltd Debt to Equity ratio 0.07 Debt to Equity ratio 0.09 ROE 40% ROE 34% Dividend Yield 4% Dividend Yield 3% P/E ratio 10 P/E ratio 3 Share price R 50 Share price R 60
Slide 24: Which shares would you buy?
Which shares would you buy? Blue Ltd Red Ltd Annual sales growth 10% Annual sales growth 10% Net Income R 6m Net Income R 4m Dividends R2 Dividends R2 Earnings per share R5 Earnings per share R 20 Equity R 15m Equity R 12m Debt R 1m Debt R 1m Share price R 50 Share price R 60